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Rule Waives Component Test for Qualifying Country End Products

The Department of Defense has issued a final rule, DFARS Case 2011-D028, amending the Defense Federal Acquisition Regulation Supplement to revise the definition of "qualifying country end product." This final rule eliminates the component test for qualifying country end products that are commercially available off-the-shelf items. Under the Buy American Act, there is a two-part test for defining a domestic end product: the product must be manufactured in the United States, and there is a formula based on the cost of foreign components compared to the cost of all components. In prior rules, the component test was waived for the acquisition of COTS items (see FAC 2005-30) and for the DFARS definition of "domestic end product" ( 70,016.515, 70,016.551). These changes were based on a determination by the Administrator for Federal Procurement Policy finding the BAA's component test does not apply to COTS items. This final rule, therefore, waives the component test for qualifying country end products that are COTS items, so that it would not be necessary to track the origin of components of COTS items that are manufactured in a qualifying country in order to determine whether an end product is a qualifying country end product. The rule amends these four clauses: DFARS 252.212-7001, DFARS 252.225-7001, DFARS 252.225-7021, and DFARS 252.225-7036. DoD made no changes to the proposed rule ( 70,020.299). For the text of the final rule, which is effective October 4, 2011, see 70,016.679.




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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